Foreign companies posting their employees to Italy must be compliant with the provisions of the Posted Workers Directive and the Italian law. In order to ascertain that the assignment in Italy matches the law provisions, the Italian Labour Authority must assess: whether the seconding company carries out activities not encompassed within simple personnel management or administration, so they cannot be considered fictitious companies (letter box companies); whether the employee is actually posted, analysing the employment…
Italian employees hired by foreign companies with a local contract must carefully evaluate the social security obligations which vary according to the country where the employee is hired.
In such circumstances, a distinction must be made between:
- EU countries, countries adopting EU legislation via specific agreements with the European Union countries with which Italy has entered into full Totalization Agreements: the employee is required to pay contributions in the host country as per the local legislation
- Countries Italy has entered into partial Totalization Agreement with: the employee is required to pay contributions in the host country in accordance with local legislation. In addition, the employee is obliged to pay “minor” social security contribution in Italy
- Countries Italy has not entered into Totalization agreements with: Italian employees hired in countries without Totalization Agreements with Italy are subject to a minimum protection, with registration in specific mandatory pension schemes and the consequent obligation to pay the related contributions as per Law n. 398/1987.
The individuals affected by this law are Italian employees hired by foreign companies
Finally foreign employers must undertake the contribution obligations regarding the following insurances:
- invalidity, old age and survivors’ insurance
- involuntary unemployment insurance
- health insurance
- maternity insurance
- insurance against accidents at work and occupational diseases;
- guarantee fund for severance pay.
Finally, in order to reduce the contribution burden resulting from the possible payment of local contribution in the foreign country, 10% discount in the Italian social security rates is allowed.
For any questions please contact us.
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